Q1- Top 4 Business Risks

1. Economic recession and subdued consumer confidence

Due to the intense economic environment, the restricted overall consuming ability and anticipative high unemployment rate have imposed an adverse impact on consumer demand. In addition, the Australian dollar depreciated 16% percent against the United States Dollar in 2013, thus the purchase power of consumer would decline. The Australian economic prospect is likely to remain weaker as economy would adjust to higher levels of inflation and commodity prices.

2. High market competition

The market in which JB Hi-Fi (JBH) operates is a mature industry, thus severe competition exists, due to the high degree of similarity, between JBH and other retailers, such as Harvey Norman, Dick Smith and The Good Guys. Although, JBH has maintained its market leading position, its ability to gain may be limited when other competitors take actions to fight for market shares, for example, JBH experienced high level of unstable discounting in the 2012 financial year.

3. Over-reliance on certain suppliers or products

Diversity and innovation are highly valued in JBH, which are embodied in the way that JBH doing business. Nevertheless, evidence shows that, during the financial year of 2013, there was over-reliance on certain suppliers or products, which is not vital for the business development if the company continues following this approach.

4. E-commerce

JBH is taking the advent of e-commerce with a quality online offer. However, security issues has always been integrated with e-business such as identity theft, dissemination of confidential information and other forms of deception. Additionally, after-sales service can be an issue for all the online sales. Therefore, the e-commerce may involve potential business risk.

Q2- Laws and Regulation applicable to JB Hi-Fi

• Competition and